Nespresso to use 'responsibly sourced' aluminium in Rio Tinto deal

Coffee giant Nespresso has sealed a landmark deal for all of its coffee capsules to be manufactured using “responsibly sourced” aluminium supplied by Anglo-Australian miner Rio Tinto.

The two companies are expected to announce on Monday that they have signed the agreement to work with Nespresso’s capsule manufacturers towards a commitment to use “100 per cent sustainable” aluminium by 2020.

Nespresso's coffee pods will be 'sustainable' under the deal.

ASX-listed Rio Tinto this year became the first mining and metals company to be granted certification by the industry group Aluminium Stewardship Initiative – an assurance that Rio’s aluminium had been produced to the highest environmental, social and governance standards. These include reduced carbon emissions, protection of biodiversity, and respect for the rights of indigenous communities in areas where its mining occurs.

Rio Tinto described the Nespresso deal as a “milestone” and a world-first for aluminium.

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“This is an important step towards the use of responsibly sourced aluminium across manufacturing industries, which Rio Tinto is the first to supply,” said Alf Barrios, the company’s chief executive of aluminium.

“It’s addressing a preference that consumers and society are clearly articulating … but it’s also good commercial sense.”

Nespresso sources its aluminium from Rio Tinto and other producers. Under the new agreement, Rio’s aluminium will be exclusively used in all Nespresso coffee pods worldwide from 2020.

Nespresso and Rio Tinto are two of the founding members of the Aluminium Stewardship Initiative (ASI), the certification organisation formed several years ago, which aims to minimise the environmental and social impact of the aluminium value chain.

“Nespresso is proud to have been a driving force in creating and implementing the Aluminium Stewardship Initiative,” Nespresso chief executive Jean-Marc Duvoisin said. “Together, we have made responsibly sourced aluminium a reality, and the ASI traceability mechanism will enable us to meet our commitment to customers to reduce the impact of their consumption.”

George Clooney advertises Nespresso.

Rio Tinto’s ASI certification followed independent third-party audits of a range of its operations spanning its supply chains, from its bauxite mines in Australia to its aluminium smelters in Canada and associated infrastructure including port and railways, Mr Barrios said.

“From bauxite all the way down to customers, the whole value chain is certified,” he said. “We expect the demand from consumers for sustainable products to continue growing.”

Sustainability, social responsibility and other so-called ESG (environmental, social, governance) issues are growing focus areas for mining companies in Australia and internationally in the face of heightened scrutiny from investors. The International Council on Mining and Metals told a mining conference in Melbourne earlier this month that there had been a “convergence” of the environmental and social demands of communities in which miners operated and the demands of institutional shareholders.

“This is all a big change from a generation ago when there was certainly pressure from communities and NGOs that spoke for them, but sustainability was a long way from being mainstreamed due to investor pressure that we see today,” said Tom Butler, the group's chief executive

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“We are today in a very different place ... with a much better understanding of what it takes to engage successfully with communities in order to obtain and maintain our social licence to operate.”